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Sky Pay £3.6 Billion To Win Bulk Of New Premier League Rights

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LONDON (Reuters) - Rupert Murdoch’s Sky (SKYB.L) will pay 3.58 billion pounds to show 128 Premier League matches for three seasons from 2019/20 in a deal that brings to an end rampant inflation in the value of the domestic rights for English top-flight soccer.

Rival BT (BT.L) will show 32 games a season, after its 885 million pound ($1.23 billion) bid secured one package.

The total raised for five of seven packages points toward a fall in the value of the rights after jumps of about 70 percent in the previous two auctions.

In 2015, Sky and BT smashed forecasts by paying a record 5.14 billion pounds to show matches featuring the likes of Manchester United, Chelsea and Liverpool, as they battled for pay-TV and broadband subscribers.

That enabled the league to go on a shopping spree, with players such as Paul Pogba (bought by Manchester United) and Virgil van Dijk (signed by Liverpool) joining clubs for more than 75 million pounds each.

But the two companies will pay a reduced 4.46 billion pounds for 160 games a season in the latest three-year rights packages.

Sky, which saw its operating profit slide 14 percent in Britain in the year to end-June after it paid its Premier League bill, said its disciplined approach had paid off.

It is spending 16 percent less per game than in its current package to retain a firm grip on the league that underpins its sports offer, and allows it to spend more on other content.

“Not only do we remain the home of Premier League football but also the home of top quality drama, entertainment, comedy and other sports,” said its UK CEO Stephen van Rooyen.

BT, which will show Saturday lunchtime fixtures from August 2019, said the league remained a big part of its sports line-up.

Slideshow (3 Images)

The two agreed in December to carry each others sports channels from early 2019 in a deal that analysts said reduced the pressure to bid ever higher sums for rights.

GOOD FOR FANS

Analyst Paolo Pescatore at CCS Insight said the auction result would come as a huge sigh of relief for both companies, and was great news for consumers.

“Despite more games being available, the Premier League has failed to maximize its prized asset,” he said.

“This suggests that there is clearly a ceiling that consumers are willing to pay for watching Premier League games and subsequently what providers are willing to bid for.”

The Premier League, however, said it was “extremely pleased” that BT and Sky continued to view its matches as an important part of their offering.

“To have achieved this investment with two packages of live rights remaining to sell is an outcome that is testament to the excellent football competition delivered by the clubs,” said Executive Chairman Richard Scudamore.

There was speculation that a U.S. internet giant such as Amazon (AMZN.O), Facebook (FB.O) or Netflix (NFLX.O) would enter the fray.

The two packages remaining to be sold, which feature simultaneous matches, could be particularly suited to an internet-streaming provider.

However they had probably not sold because they had not achieved a reserve, said IHS Markit analyst Tim Westcott.

“(Sky and BT) have seen off the prospect of a challenge from a newcomer like Amazon or Google - even though this prospect was more a case of hype than expectation,” he said.

The Premier League said it still had interest in the last two packages from multiple bidders.